Due to global economic conditions, rupee overvaluation and uncertainties post by the GST regime, the industry is facing a continuous decline in exports has made the Government of India to announce new duty drawback rates for various export products including textile and garment for the year 2017-18, which will be effective from October one.

The new duty drawback rate for garments will be 2 per cent as compared to the current 7.7 per cent. The rate on blended apparels containing cotton and man-made fibres will be 2.50 per cent as against 9.5 per cent at present. Woollen clothing will come down to 3.50 per cent from 8.7 per cent.

Products (under HS codes 61 and 62) made of silk will come under the bracket of 4.80 per cent (the current rate is 7.6 per cent).

“The new rates are unacceptable and the Ministry of Textiles should immediately consider AEPC’s recommendation for extending the current transition rates until 31st March 2018, to instil confidence in the sector,” Ashok G Rajani, Chairman, Apparel Export Promotion Council (AEPC), the official body of apparel exporters in India said.

The Southern India Mills’ Association (SIMA) and TEXPROCIL have also urged the Centre to reconsider the rate cut. The trade associations state that the duty drawback plays an important role in lifting the textile & garment industry’s cost competitiveness.